Hargreaves Lansdown AUA and revenues fall as market volatility hits business

Hargreaves Lansdown shares rose 3% to 869.3p in early morning trading on Friday after the firm announced a 92,000 client growth to 92,000 in FY 2022.

The investment group confirmed the volatile market environment had also impacted its business, with an 8% revenue fall to £583 million against £631 million in FY 2021 as lower than expected share dealing volumes led to more atypical trading volumes experienced across the Covid pandemic last year.

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Hargreaves Lansdown reported a drop in total assets under administration to £123.8 billion from £135.5 billion.

The company noted a 26% slide in pre-tax profits to £269.2 million against £366 million the last year, along with a 19% underlying pre-tax profit fall to £297.5 million from £366 million.

Net new business inflows also saw a sharp decrease of 37% to £5.5 billion compared to £8.7 billion in the previous year.

Hargreaves Lansdown reported a 19% diluted EPS decline to 50.4p compared to 62.5p.

“Against a macroeconomic and geopolitical climate not seen in a generation with subdued flows and lower activity across wealth management, we have delivered £5.5 billion of net new business through the year and the quality of our service attracted a further 92,000 net new clients, said Hargreaves Lansdown CEO Chris Hill.

“Our focus is firmly on servicing our clients, disciplined cost management and delivering our strategy because we remain confident that it will deliver outstanding client service, strong shareholder returns and market leadership for HL.”

The group also highlighted the progression of its Active Savings operations, with two new partner banks including Santander International bringing its number of partners to 15. The company added the rising interest rates environment had served to boost the sector’s performance.

“Our progress against our strategic goals has been strong since February with the launch of the first of our new funds and an acceleration in our Active Savings proposition, an essential service to help clients manage their cash savings at this critical time, leading to a record £4.6 bn assets, with over 114,000 client accounts, said Hill.

The investment advisor recommended a 3% ordinary dividend hike to 39.7p compared to 38.5p, alongside a 21% total dividend drop to 39.7p against 50.5p the last year.

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